Coin op is one way to go but you will never make money with a duplex, it just keeps them from abusing you with sharing them with friends and family.

Most of the older homes were over engineered however they also are more likely to have been abused meaning too many layers of siding or roofing or crappy electrical or plumbing splices here and there.

So long as it is not abused.

If you have no recourse, it would be better to sell than to let this HOA interfere with your business forever.These growing HOA abuses are an illustration of how little help normal people get from state and local governments.

What happens if she starts abusing this down the road?

I'm confident I can find graduate student / classmates to rent out my unit if it's priced with the market and close enough to a bus line.  

In my mind its just like trying to start in the RE sales game.. you need capital you need training and you need the TIME to get your deals flowing// it just does not happen over night.. you can go to REIA's and let the established folks use and abuse your time..

The system will be abused again to the point it collapses.The likely problems are massive unemployment, no one has money to pay rent, no one will loan money to buy a home. 

I am leaning more towards laminate, but going back and forth if I want something durable, take the abuse like granite or replacing laminate counter tops every other tenant?

I understand the idea of a grace period, but sometimes tenants can abuse this.